Monetary policy
Low inflation partly down to luck – CEPR report
David Miles and co-authors argue advanced economies’ luck on inflation could run out; recommend central banks prepare
Brazil’s central bank slows pace of monetary easing
Central bank scales back cuts to 75bp with suggestion it will slow pace further moving forward; inflation continues to fall as forecast
ECB likely to extend QE despite stronger growth, analysts say
Central bank expected to prolong programme by six months at reduced monthly rate of €30 billion
The optimal size for central bank balance sheets
As the Fed seeks to reduce the assets on its balance sheets, Charles Goodhart examines the role between monetary and fiscal policy, central bank and debt office, and the optimal size of a central bank’s balance sheet
Sri Lanka working to introduce ‘proactive’ policy – governor
Central bank in the past tended to do “too little, too late”, leading to big swings in interest rates, says Coomaraswamy
RBNZ faces mandate review under new government
Coalition agreement retains Labour pledge to consider shake-up of Reserve Bank mandate
Interview: Edward Prescott
The Nobel Prize-winner speaks to Daniel Hinge about time inconsistency and real business cycle theory, and explains why there is no ‘productivity puzzle’
RBA needs representative for the poor – religious group
The proposed new board member would help the central bank understand the effect monetary policy has on the poor, says group
Fiscal policy shocks amplified by accommodative monetary policy – paper
IMF research analyses impact of government spending spillovers, noting effects are amplified in countries with interest rates near the lower bound
Goldfajn stresses current target remains ‘credible’
Central bank pushed back against calls for the target to be raised during 2016 debate
Higher rates contributed to recovery in Latin America – IDB economist
Less hawkish policies can fail to generate growth but push up inflation, research finds
Inflation target supports price setting and wage formation – Ohlsson
Target contributed to economic recovery in Sweden, Riksbank deputy governor says
BoE’s new MPC members disagree on future path of hikes
New deputy Dave Ramsden sees current degree of slack to be too great to warrant removal of stimulus, while Tenreyro believes it cannot “persist for too long”
Blanchard and Summers call for rethink of stabilisation policy
Both economists question consensus on fiscal prudence and advocate stricter financial regulation
BoE paper sheds light on global policy transmission
Comparison of UK and Hong Kong based on bank-level data finds evidence of both portfolio and funding effects
FOMC split over inflation forecasts, minutes show
Participants expressed concern that low inflation this year might reflect not only transitory factors
IMF cautions global vulnerabilities put growth at risk
Fund calls central banks to provide needed monetary support while tackling underlying threats
IMF: global recovery is broad but incomplete
Fund ups its growth forecasts but says many are missing out; Maurice Obstfeld urges policymakers to take action while “times are good”
Eurozone rate rises would have mixed impact on banks, ECB says
Keeping rates at the same level would decrease net interest income absent credit growth
More communication may hamper monetary policy, paper says
Independence and bigger MPCs may convey confusing messages and provoke forecast errors
Disagreement over inflation expectations weakens monetary policy – Bundesbank paper
Research uses data from Fed’s survey of professional forecasters from 1968 to 2017
Theory of inflation dynamics is not good enough, warns Tarullo
Former Fed governor says economists have “almost paradoxical” mix of scepticism towards and reliance on shaky concepts
Costa Rican central bank gets $1bn to shore up exchange rate
Regional fund offers credit line as central bank aims to boost reserves and relieve pressure on exchange rate; central bank plans a move towards inflation targeting
Perng Fai-nan on how Taiwan has eluded crisis for 20 years
Taiwan’s governor explains how pragmatic interventions have engendered two decades of financial stability, despite the island’s status as a small, open economy